Eli Lilly, Takeda Win Dismissal Of Ark. Taxpayer Actos Suit

Takeda headquarters, in Tokyo, Japan. The company has over 30,000 employees worldwide and achieved $16.2 billion USD in revenue during the 2012 fiscal year. Launched in 1999, Takeda’s Actos has become the best-selling diabetes drug in the world.

A Louisiana federal judge on Thursday threw out a proposed class action alleging that Takeda Pharmaceutical Co. and Eli Lilly & Co. ripped off taxpayers by hiding the risks of their diabetes drug Actos, after the Arkansas Supreme Court ruled the drug was properly prescribed by doctors.

In a two-page order granting the defendant’s motion to dismiss for failure to state a case, U.S. District Judge Rebecca F. Doherty, who is overseeing the sprawling Actos-related multidistrict litigation consolidated in Louisiana, said claims for illegal exaction originally brought by plaintiff Greg Bowerman in Arkansas state court must fail as a matter of that state’s law.

The defendants argued that plaintiff Greg Bowerman failed to properly plead that the pharmaceutical companies had violated the theory of illegal exaction, a cause of action under the state constitution that allows Arkansas citizens to sue on behalf of the state’s taxpayers in cases where public funds are misappropriated or illegally spent.

In 2013, Judge Doherty said she would defer ruling on the motion to dismiss pending certification to the Arkansas Supreme Court on the issue of whether Arkansas recognizes illegal exaction claims in Bowerman’s case. In September, the high court ruled that Actos was prescribed by physicians, and that nothing in the Arkansas Code indicates the state could choose not to reimburse properly prescribed pharmaceuticals. The court said because the pharmaceuticals were prescribed by a physician, reimbursement for them can’t be considered arbitrary under Arkansas law.

“This court adopts herein the ruling of the Arkansas Supreme Court and finds that Mr. Bowerman has failed to state a claim of illegal exaction upon which relief can be granted under the facts as argued,” Judge Doherty’s order states.

In his complaint, Bowerman claimed that Takeda and Eli Lilly induced illegal exaction because they failed to inform state officials and physicians of the alleged long-term risks of Actos use, causing the state to spend public funds on the drug that it otherwise would not have.

Bowerman’s case is one of thousands filed in recent years targeting Takeda and Eli Lilly for failing to warn consumers of health problems — particularly increased risk of bladder cancer — that allegedly can result from long-term use of Actos. On Nov. 18, a West Virginia state jury found in Takeda’s favor on failure to warn claims, but found the plaintiff was prevented from proving his case by the company’s intentional destruction of key documents. Eight Actos trials have gone before a jury to date, with the next trial scheduled to take place in Philadelphia in January.

Bowerman filed suit in Arkansas state court in 2011, and the case was later removed to federal court and transferred in June 2012 to multidistrict litigation in Louisiana that includes a dozen other cases, as well as more than 100 others that will be treated as tagalongs under the rules of the U.S. Judicial Panel on Multidistrict Litigation, according to an order by the panel. The Louisiana multidistrict litigation was created in December 2011.

Takeda spokesman Kenneth D. Greisman said the company agrees with the court’s ruling, and attorneys for Bowerman did not immediately respond to a request for comment.

Bowerman is represented by Bryan Huffman and Donald Spears of Spears Huffman PLLC and Luther Sutter of Sutter & Gillham.

The individual case is Bowerman v. Takeda Pharmaceuticals USA Inc. et al., case number 6:12-cv-01590, in the U.S. District Court for the Western District of Louisiana. The multidistrict case is In re: Actos Products Liability Litigation, case number 6:11-md-02299, in the Western District of Louisiana.